Private patient units will be an important contributor to NHS trusts’ balance sheets
At Integre Consulting we facilitate a growing network of NHS private patient units established with the objective of helping trusts develop their offerings both in England and outside the UK. While we don’t encourage the trusts we work with to think in terms of “goldmines”, we do promote a methodical private patient unit service development and/or extension with a view to securing a net contribution and opportunities for cross-subsidisation in NHS patient services.
We recognise that for some NHS boards there can be a sense of conflict between NHS and private patient priorities. However at a time of unprecedented pressure on public services the net contribution available to trusts through private patient service development still often requires a shift in established thinking. Well managed foundation trust units generate considerable surpluses above those which can be achieved from comparable NHS treatments at tariff. Central funding is in decline and reinvestment opportunities will become increasingly valuable to trusts’ balance sheets.
There is a range of business models and funding routes available to trusts, with choices being largely driven by location, demographics, historical performance, PMI network exposure, attitude to risk and consultant profiles. Early adopters have tended to lower-risk options electing to work with independent providers, offsetting access to expertise for lower returns. There are indications that this appetite for risk is changing and a greater willingness to work independently within an informal association is becoming evident.
The natural corollary to this shift in thinking (and something that we believe will continue to develop), is the creation of regional service specialisations, increased collaboration between bordering organisations, sharing of clinical and management resource and centralisation of back office functions. In light of the Office of Fair Trading judgement on the South Central region’s information sharing earlier in the year, we are currently trying to establish some guidance on the extent of admissible collaboration between organisations.
Regulation issues aside, we agree with the premise of HSJ’s article that NHS trusts now really do have an open market. How they choose to engage and how quickly will depend on: the prioritisation of private patient services on board agendas; the quality of intelligence presented on which to base decisions; and appetite and funding to engage. In the meantime our network continues to develop based on sharing the best operating and funding models for NHS private patient services.
The directors, Integre Consulting Limited